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Leaked Xbox Boss Email Perfectly Explains Why Game Publishers Are Eating Themselves Alive (kotaku.com)
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[-] nooneescapesthelaw@lemmy.ml 109 points 9 months ago

The email: Spencer writes,

Over the past 5-7 years, the AAA publishers have tried to use production scale as their new moat. Very few companies can afford to spend the $200M an Activision or Take 2 spend to put a title like Call of Duty or Red Dead Redemption on the shelf. These AAA publishers have, mostly, used this production scale to keep their top franchises in the top selling games each year. The issue these publishers have run into is these same production scale/cost approach hurts their ability to create new IP. The hurdle rate on new IP at these high production levels have led to risk aversion by big publishers on new IP. You’ve seen a rise of AAA publishers using rented IP to try to offset the risk (Star Wars with EA, Spiderman with Sony, Avatar with Ubisoft etc). This same dynamic has obviously played out in Hollywood as well with Netflix creating more new IP than any of the movie studios.

Specifically, the AAA game publishers, starting from a position of strength driven from physical retail have failed to create any real platform effect for themselves. They effectively continue to build their scale through aggregated per game P&Ls hoping to maximize each new release of their existing IP.

In the new world where a AAA publisher don’t have real distribution leverage with consumers, they don’t have production efficiencies and their new IP hit rate is not disproportionately higher than the industry average we see that the top franchises today were mostly not created by AAA game publishers. Games like Fortnite, Roblox, Minecraft, Candy Crush, Clash Royale, DOTA2 etc. were all created by independent studios with full access to distribution. Overall this, imo, is a good thing for the industry but does put AAA publishers, in a precarious spot moving forward. AAA publishers are milking their top franchises but struggling to refill their portfolio of hit franchises, most AAA publishers are riding the success of franchises created 10+ years ago.

[-] OrnluWolfjarl@lemmygrad.ml 87 points 9 months ago

Spencer's analysis is just an overview of the current symptom.

This is the real disease:

because it sees a new platform it can scale to feed the financial growth demanded by investors.

Investors/shareholders demand infinite growth, but there's finite space to grow (millions of games, few customers). This is why, in the past 2 decades we've been seeing the scummiest of practices being employed again and again, as well as a 300% hike in base prices. Capitalism has eaten gaming.

But we've been observing this trend in AAA and AA publishers/developers mostly. Indie gaming is alive and well and evolving towards being better and better. Why? Because indie developers are not usually beholden to investors.

Once you hear a gaming company you used to like has gone public, say your condolences and then run away.

[-] theragu40@lemmy.world 31 points 9 months ago

It's the same shit across every industry. Successful company goes public, investors demand yearly double digit growth, and after a few years they are imploding.

Investors do not care about the future, sustainability, or anything except immediate profitability. What you described is exactly what happens, in gaming and everywhere else. It sucks.

[-] xavier666@lemm.ee 11 points 9 months ago

I would like to refer to this image which is probably more than a decade old now

https://frankkliewer.com/wp-content/uploads/2015/09/shareholder-value.jpg

[-] MajesticSloth@lemmy.world 8 points 9 months ago

That last sentence is so spot on. After reading a topic yesterday, I was trying to think of one time a game company went public, and it ending up a good thing for the gamers in the long run. If anyone knows of one, I'd love to hear it.

[-] ampersandrew@kbin.social 1 points 9 months ago

Check back in on Devolver, Paradox, and TinyBuild in 10 years. They're scaling up to cover the market that Ubisoft, Activision, EA, and Take Two abandoned.

[-] ampersandrew@kbin.social 5 points 9 months ago

This is why, in the past 2 decades we’ve been seeing the scummiest of practices being employed again and again, as well as a 300% hike in base prices.

Two decades ago, games were $50 which, due to switching to discs, was a price reduction over cartridges, so this point in time is a bit cherry picked. But even rolling from there, a 300% hike in base prices would mean games cost $200, and that's just not true.

[-] OrnluWolfjarl@lemmygrad.ml 0 points 9 months ago* (last edited 9 months ago)

50 dollars were console games. On PC you'd often find the same game at 30 dollars (disk) or 20 dollars (steam) on release. The difference was due to console makers taking a standard fee cut from every sale.

The first AAA games back then to be released at 40 and 50 dollars on PC were COD MW1 and BF3, which set the trend for all other games since then. This was pure profit for the publishers, since there was no cut for console makers on PC. And before you say it, no, the Steam cut back then wasn't even comparable (much less since it was a % cut and not a standard fee). In fact Steam hiked their cut because of the price hike triggered by EA and Activision, which is what then made EA pull their games off Steam and create Origin.

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[-] demonsword@lemmy.world -1 points 9 months ago* (last edited 9 months ago)

But even rolling from there, a 300% hike in base prices would mean games cost $200, and that’s just not true.

if you consider that nowadays (almost) all games ship incomplete and demand DLCs... yeah, it's true

[-] ampersandrew@kbin.social 0 points 9 months ago

That wouldn't be the base price; the base price is $70 for the biggest games. I think people are also a bit liberal with labeling games as "incomplete", when really they mean, "this game will have DLC after the fact because it's the best way to make games that take years to make without laying people off". And just to take a brief look along some games in my library, Cyberpunk 2077 would cost a maximum of $100 with DLC, by the time Guilty Gear Strive is sunset (if it runs for 5 years) it will still be shy of $200 in a worst case, and I'm seeing far more games without DLC than with DLC.

[-] demonsword@lemmy.world 2 points 9 months ago

DLCs aren't the only "evil", there's also the case for microtransactions and other stupid monetization bullshit schemes

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[-] Lettuceeatlettuce@lemmy.ml 73 points 9 months ago

Fight anything that prevents you from owning and controlling your content. Reward, companies and groups that allow you to truly own what you purchase.

[-] Kushan@lemmy.world 20 points 9 months ago

It's a noble stance, but literally everything is digital these days. Even disk based games are requiring day 1 updates (or aren't coming with the content on the disk in the first place), meaning you're at the behest of the platform to keep your content available.

[-] Lettuceeatlettuce@lemmy.ml 21 points 9 months ago

Digital is not the problem. Lack of true ownership is the problem. GoG is DRM free. Steam isn't great on this, but it's better than other alternatives for now. Sailing the high seas is the best option in many cases.

It's not all or nothing, you can take small steps to stop supporting the worst offenses. First step, don't use any game streaming services where you just subscribe to a rolling catalogue each month/year. PlayStation Plus and Xbox Game Pass are examples of this.

Nintendo is awful too, their games should be ripped from physical media if possible and emulated, or otherwise aquired on the seven seas and emulated. It's a great way to play their games without supporting their evil practices.

Support FOSS games and FOSS-friendly companies. Valve is a good example. Although not perfect by any means, they have proven to be far friendlier to FOSS apps, games, and platforms than most other companies. If you have to get DRM-locked games, get them through Steam. At least they have offline mode and allow full access to all your game files so you can save them to a separate location for archives/backups.

It starts with small things, but if lots of people start doing this, it will have a noticable effect.

[-] blandy@lemmy.ml 4 points 9 months ago

Nintendo Switch carts have actual content on them - they're more than just fancy unlock keys.

[-] Kushan@lemmy.world 1 points 9 months ago

Kingdom hearts has entered the chat

[-] blandy@lemmy.ml 2 points 9 months ago

Yeah, cloud versions (which are stupid) require an internet connection.. do they even sell the cloud version as a cart? If they do and it's not advertised as such, that's obviously a problem.

[-] Kushan@lemmy.world 1 points 9 months ago

That's the problem though, most Switch games are not available on carts.

[-] blandy@lemmy.ml 2 points 9 months ago

If you count eShop shovelware, sure. Most Switch games worth owning are available on carts.

[-] Kushan@lemmy.world 1 points 9 months ago

I won't argue that the eshop isn't full of shovelware because it is - but even shovelware needs to be preserved.

The problem with this line of debate is that there are some games worth having that are only on the eshop and it's still a digital barrier to you truly owning the software. Saying most games are available on a physical medium doesn't help those that aren't and it's a situation that's only going to get worse.

Essentially what I am saying is that none of the big 3 are innocent here and just because some are slightly better than others doesn't make it okay.

[-] blandy@lemmy.ml 1 points 9 months ago

Agreed on all points but there's some nuance I feel you're neglecting.

I never said Nintendo was blameless or beyond reproach (they suck in lots of ways) only that they do have physical carts that work out of the box. This is something that continues to benefit me. For example, I picked up Advance Wars reboot on the way to the airport and was able to pop in the cart and start playing at the gate. Credit where it's due, you know? I harass everyone I know with a Switch to buy physical because that's the only way we'll continue to have this shred of ownership.. at least that's still on the table as a possibility compared to the other two.

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[-] EveningNewbs@lemmy.world 36 points 9 months ago

The suggestion here is that the type of game that can thrive on a subscription service is either a small one that benefits from better curation and visibility or a live-service one that can make up revenue on the backend by charging all the new players microtransactions (the new store shelves are inside the games themselves).

I've been saying this since Game Pass launched: it encourages scummy monetization. The kind of games that come to it are going to have more and more content locked away behind microtransactions to make up the money lost by not selling copies. It's going to gradually become full of "free" to play garbage, and people will accept it because they didn't pay for an individual game outright.

[-] ampersandrew@kbin.social 6 points 9 months ago

Of the two options that Phil says Game Pass encourages (and I agree with his analysis), one is the opposite of scummy and something the market could use more of.

[-] RightHandOfIkaros@lemmy.world 16 points 9 months ago

How about fix the ballooning development costs? Games dont need $200 million plus to be good. Maybe start with that problem.

[-] fckreddit@lemmy.ml 11 points 9 months ago* (last edited 9 months ago)

We don't need super high quality graphics for every AAA production. Sometimes, Just good enough graphics, but with better interactivity with the environment like ToTK and Baldurs Gate 3. I mean , I love RDR2, but honestly, shrinking horse testicles is a bit too much attention to detail.

As an example, cell shading of ToTK still looks amazing and far more enduring as a graphics style. Also, Elden Ring, arguably has worse graphics than RDR2 or the latest CoD. But, because of it's amazing art direction it will age pretty well.

This can help really reduce the high dev costs.

[-] cdipierr@lemmy.world 16 points 9 months ago

The horse testicle physics are the heart of the game, and we should be boycotting any game that doesn't have them!

[-] Krauerking@lemy.lol 6 points 9 months ago

Game developers are scared of having to put horse testicle physics in their games but they need to understand this is the new standard!

They just are scared of having to actually watch horse testicles and truly understand what makes them work but that's just laziness talking!

[-] cdipierr@lemmy.world 6 points 9 months ago

I'm done giving developers a pass for not even putting in the minimum. Larian and Bethesda didn't even put horses in their games because they're so afraid of rendering the sack.

Everyone says Phantom Liberty will finally redeem Cyberpunk, so I can only assume CD Projekt has spent the past three years creating a perfect horse with the most dazzling balls we've ever seen. Can't wait for those RTX and DLSS 3.5 rendered oysters.

[-] SheDiceToday@eslemmy.es 7 points 9 months ago

... As someone who hasn't played RDR2, or really paid attention to it... What? There are seriously shrinking horse testicles?

[-] fckreddit@lemmy.ml 6 points 9 months ago

Yeah, Horse testicles shrink in cold regions of the map. It's kind of a dumb detail to be honest.

[-] FaeDrifter@midwest.social 1 points 9 months ago

I need to know if this detail was in release notes, or some player found it by repeatedly checking his horse testicles.

[-] nooneescapesthelaw@lemmy.ml 6 points 9 months ago

Thats what this Spencer guy says in the email:

Over the past 5-7 years, the AAA publishers have tried to use production scale as their new moat. Very few companies can afford to spend the $200M an Activision or Take 2 spend to put a title like Call of Duty or Red Dead Redemption on the shelf. These AAA publishers have, mostly, used this production scale to keep their top franchises in the top selling games each year. The issue these publishers have run into is these same production scale/cost approach hurts their ability to create new IP.

[-] altima_neo@lemmy.zip 5 points 9 months ago

I think a lot of that also gets spent on marketing.

[-] OrnluWolfjarl@lemmygrad.ml 6 points 9 months ago

The budget is also a marketing ploy. The average person hears about a game costing hundreds of millions to make and they think "well then, it MUST be good". It's more or a pissing contest among publishers. Most of that budget does indeed go to marketing and executive wages/bonuses.

And from the publisher's perspectives, that's really a good investment of the budget, because it doesn't just drive up sales. It also cultivates customer loyalty and fanboyism (e.g. "we are spending all that money because we believe in the game, and we want to give our loyal fans the best experience possible" is a very common line in pre-release interviews).

For example, there's a false equivalency among gamers, propagated by this kind of propaganda: "I have to pay the high prices and engage in microtransactions/DLC, because that supports the game developers and their high budgets". In reality, the people who actually make the game see very little of that money. Their wages, in most instances, are shit and do not reflect the hours they put in. However, gamers rarely want to understand that, and instead extend the publisher pissing contest among themselves ("the game I'm playing now spent more money than the game you are playing, therefore it's the superior product").

[-] Krauerking@lemy.lol 1 points 9 months ago

Seriously, I worked in media creation and like looking at movie budgets is painful for me cause so much of it is to pay people already at the top and overpaid more than enough.

Production and material costs haven't grown as much as marvel movies would make you think so it is all going to executives lawyers and heads of the sweat shops of special effects houses.

[-] RightHandOfIkaros@lemmy.world 3 points 9 months ago

Even if it does, thats still too much money. How much money did Hollow Knight spend on marketing? Or what about Terraria? Or Minecraft pre-buyout? How much was spent on marketing for games like Deep Rock Galactic? I can guess probably less than $100 million each. Maybe even less than $10 million.

[-] alokir@lemmy.world 5 points 9 months ago

You're listing outliers that did well despite their smaller marketing budget. There are tons of great games from smaller studios that get buried because nobody knows about them.

[-] Jakeroxs@sh.itjust.works 0 points 9 months ago

Hollow Knight sold 2.8m copies as of 2019

Modern Warfare (2019) sold 31m copies

[-] mathemachristian@lemm.ee 4 points 9 months ago

Or collectivize game studios.

[-] p03locke@lemmy.dbzer0.com 3 points 9 months ago

They are at the point where they equate video games with Hollywood.

[-] jonne@infosec.pub 9 points 9 months ago

AAA video game budgets have surpassed Hollywood years ago.

[-] ampersandrew@kbin.social 2 points 9 months ago

They can still have similar production value and not be open world games that take 80 hours to finish. It just makes far more sense to me to bet small with tons of projects than to bet big with only a few, because then you'll find the PUBGs and the DOTAs that Phil is talking about eventually.

[-] restingboredface@wayfarershaven.eu 1 points 9 months ago

So, Microsofts suggestion for the problem of studios beating old IP to death isn't to support smaller indie projects that are developing new IP.

Doesn't gamepass make this problem worse? It makes it affordable and incentivizes people to try many of those big AAA games so studios still get paid (maybe less than if it's bought outright, but still i imagine it's still compensated).

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this post was submitted on 25 Sep 2023
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